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January 4, 2008
Applying Lean Thinking To IT
CIOs Must Change IT’s Workaround Culture To Stimulate Innovation
This is the third document in the “Fixing IT Complexity” series.
by Alexander Peters, Ph.D.
with Alex Cullen and Tim DeGennaro
EXECUT I V E S U M MA RY
Lean thinking is a powerful methodology that can help IT maximize the real value from technology
spending. Lean is both a process improvement tool and a means to transition an IT culture from one
of workaround and ambiguity to one of continuous improvement, leading to disciplined innovation.
However, Lean thinking requires a formalized approach to governance based on detailed, specified,
and synchronized processes and resources and a culture stimulating experimentation, rapid change,
collaboration, and learning. CIOs looking to achieve lasting performance improvements in their
organizations should consider Lean.
Lean thinking is a powerful management methodology, which has helped many organizations make the
transition from workaround cultures and practices to continuous process improvement and disciplined
innovation. The roots of lean thinking are in manufacturing, but the universality of its principles have
spread it quickly to other sectors such as logistics, military, services, and more recently to software
development.
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Applying Lean Thinking To IT 2
For CIOs
· Unreasonable work. When the management pushes the performance of people, processes,
and machines beyond their natural capacities, the consequences are improvisations and
ill-considered decisions. Organizations with weak architecture, planning, and product
management functions are highly exposed to this category of waste, as customers and
developers are changing requirements while products and services are developed; standards
ignored; and existing systems, assets, and functions carelessly duplicated.
· Unreliable non-synchronized work. When processes are not integrated, the result is delays
and unnecessary steps, resources, and space. Organizations with incomplete processes struggle
with this category of waste, for example when system component deliveries are not coordinated,
incidents are not correlated when closed, and products and services are not delivered in time
due to lack of plan synchronization.
· Lean as a process improvement tool. The “Kaizen Blitz” is Lean’s tool for process improvement.
It is similar to other process improvement methodologies such as Just-In-Time (JIT), Six Sigma,
or Total Quality Management (TQM). Executives use this tool to uncover and implement
opportunities to improve lead times, cut waste, and optimize development and provisioning
processes. Some firms have even combined Lean with other methodologies for optimal results.3
For example, Xerox reported using Lean Six Sigma to get help desk service levels at a lower
cost and with faster turnaround and to reduce the infrastructure costs per phone call while
improving the level of service to its sales organization.4
· Lean as the basis for organization strategy. In the “full implementation” of Lean, the organization
is viewed as a system to deliver value to customers. The zero-defects, JIT, no-waste goal is core to
the system’s strategy and is articulated by a set of strategic principles, unambiguously positioning
it relative to its customers. The principles guide the analysis of the provisioning-consumption
processes — highlighting the changes required to streamline the relationship between customers
and suppliers and maximize the value of products (see Figure 2).5 Industry leaders such as Alcoa,
Southwest Airlines, or Vanguard have demonstrated that, by applying such principles, it is possible
to steadily optimize the contribution of a large number of individuals and teams and deliver far
more value than their competitors.
· Lean as culture transformation. By making the elimination of waste in all its forms a top
priority for their staff, organizations create a culture of continuous improvement and innovation.
Lean’s most famous implementation, the Toyota Production System (TPS), has grown naturally
out of the rigorous implementation of a culture focusing on learning and the elimination
of waste at all levels of its organization, not from the promotion of a command-and-control
environment.6 Several basic principles are guiding the staff ’s behavior, encouraging continuous
learning, and addressing ambiguities and deviations, as they occur (see Figure 3).
· Improve the efficiency of IT delivery. IT management should train its staff in Lean tools such
as Kaizen Blitz and charge them to streamline and improve the performance of IT’s service
delivery value chain — from applications development to incident, problem, change, and
release management. Using the principles of Lean consumption, dedicated teams of six to 10
people (representing IT staff, customers, and one or more outsiders) analyze the process flows
between customers, the IT organization, and its suppliers, identifying waste and proposing
improvements. Execs must communicate in advance the Blitz’s intention to those affected, and
then the Blitz team coordinates the implementation of the proposed improvements in a fast and
pragmatic way.
· Simplify and formalize IT management oversight. Execs should target waste from disjoint
management processes such as enterprise architecture and planning, IT portfolio and financial
management, and value governance. Make these processes flow by examining them as a
system and clearly specifying their interfaces, functions, and decision rights. Formalized IT
governance frameworks, such as Val IT, simplify the synchronization of processes, and improve
the communication among stakeholders — customers, development, delivery and support
functions, and suppliers.7
· Continuously educate the IT organization. IT leadership should make sure that the staff
shares the Lean thinking values and common priorities at all its levels. The larger and more
complex the IT organization, the more important it is that internal and external employees
make decisions consistent with the strategic direction of the company. Enable a culture of
openness by encouraging the staff to repeatedly assess the consumption-delivery processes and
life cycles, and address and resolve issues for optimal performance.
R E C O M M E N D AT I O N S
ENDNOTES
1
IT has a natural tendency toward adding unnecessary complexity in the form of duplicate assets, multiple
processes to achieve the same ends, or overlapping organizational responsibilities. Unnecessary complexity
adds to IT costs and risks and reduces its effectiveness. The only sustainable remedy against these failings is
to strategically apply disciplined consolidations, focusing on their business value and long-term impact on
IT. See the November 5, 2007, “Best Practices: Adopt The Discipline Of Consolidation” report.
2
CIOs who wish to position IT for more sustainable contributions to business productivity and innovation
must first address two problems that have consumed IT since the early days of client-server: 1) duplication
within IT assets and organizations, and 2) IT’s traditional workaround culture. These conditions sap IT
budgets and management’s attention — making focus on business outcomes elusive and fleeting. CIOs must
regularly look for symptoms signaling a rise in duplication and organizational ambiguity on the strategies
and values that should guide IT efforts. See the July 13, 2007, “Position IT For Innovation By Fixing
Duplication And Ambiguity” report.
3
Traditionally, Lean and Six Sigma have been viewed and utilized as distinctly separate methodologies to
analyze and improve processes. Rather than employing them separately, many process gurus now advocate
a marriage of the two for more dramatic process improvement. While this approach is valid, project leaders
of process improvement efforts that forcibly combine the two methodologies without understanding what
they are trying to improve will achieve limited success. Process professionals must first understand their
level of process maturity to choose the appropriate blend of Lean and Six Sigma methods and tools. See
the November 21, 2007, “Making The Marriage Work: Lean, Six Sigma, And The Business Process Maturity
Model” report.
4
Source: Elizabeth Ferrarini, “Interview: Dave Rowlands — Author Tells How to Put IT Costs on a Diet
With Lean Six Sigma,” Enterpriseleadership.org, August 16, 2006 (http://enterpriseleadership.org/content.
php?cid=1442).
5
Source: James P. Womack and Daniel T. Jones, “Lean Consumption,” Harvard Business Review, March 2005.
6
Source: Steven Spear and H. Kent Bowen, “Decoding the DNA of the Toyota Production System,” Harvard
Business Review, September 1999.
7
An IT governance framework articulates decision rights with respect to IT investments to ensure that they
deliver the maximum business value at an acceptable level of risk. To do this, you must be able to measure
business value and also manage and communicate value delivery. IT value delivery is part of IT governance
— it answers the following questions: 1) Are we doing the right things? and 2) are we getting the benefits?
Building on COBIT, the IT Governance Institute has published Val IT as a framework for the governance
of IT investments. Organizations struggling to execute IT strategies that deliver business value and to
communicate this value to stakeholders should evaluate Val IT as a tool for improved value delivery. See the
June 22, 2007, “From IT Governance To Value Delivery” report.
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